On Dec. 20, 2018, it was announced that U.S. “Defense” Secretary James “Maddog” Mattis was resigning. Mattis resigned in protest over President Trump’s decision to withdraw 2,000 U.S. troops fighting in northeast Syria and cut in half the number of U.S. troops fighting in Afghanistan.

It was originally announced that Mattis would stay on until Feb. 28, which would allow time for President Trump to nominate a successor and for the successor to confirmed by the Republican Senate. Within days, however, it was revealed that “Maddog” would at the president’s insistence leave by Jan. 1. Mattis was replaced “on a temporary basis” by Patrick Shanahan, a former Boeing executive. Shanahan’s official title will be “acting” secretary of defense. Unlike Mattis, Shanahan is a civilian who comes from the industrial capitalist side of the military-industrial complex.

Since he assumed office on Jan. 20, 2017, Trump had been surrounded by a ring of generals, the most prominent of which was Mattis. General Mattis was known to be an enthusiastic supporter of the war in Afghanistan as well as all the other colonial wars the U.S. has been fighting around the world, including the war in northeastern Syria. Even more important, he is a strong supporter of NATO, which acts as the military wing of the U.S. world empire.

Trump, in contrast to Mattis and other generals who have surrounded Trump until recently, has expressed skepticism about continuing the wars in Afghanistan and Syria. According to the U.S. government, U.S. troops are in Syria to fight the remnants of ISIS and protect “our allies” the Kurds against NATO member Turkey.

As 2018 winds down, political instability is sweeping the Western imperialist countries – both the United States and Western Europe. In the United States, as part of a plea bargain with federal prosecutors, Michael Cohen, Trump’s former lawyer and “fixer,” pleaded guilty to violating with “Individual 1” U.S. campaign finance laws. Cohen faces three years in prison.

It is no secret that “Individual 1” is one Donald J. Trump, the current president of the United States. According to Cohen’s plea, Trump directed Cohen to break U.S. campaign finance laws in order to pay “hush money” to porn star Stormy Daniels and “Playboy playmate” Karen McDougall. Trump paid the hush money because he didn’t want the headlines of his extramarital affairs to dominate the news in the weeks leading up to the U.S. presidential election.

Since these payments violated federal election law, it is clear that Trump committed felonies. These felonies, it should be pointed out, are not connected with the so-called Mueller probe into whether Trump, other members of the Trump family, or other associates violated U.S. laws as part of their alleged collusion with Russia in the 2016 elections. That is a separate matter. So far, Mueller and his prosecutors have not presented concrete evidence of law-breaking on the part of Trump in this matter, though there continues to be much speculation about this possibility in the media.

Theoretically, Trump can now be impeached because he committed felonies, which meets the U.S. constitutional standard for impeachment for “high crimes and misdemeanors.” Some Democrats have suggested that in light of these facts impeachment proceedings against Trump in the House of Representatives should now commence. However, there is also a general feeling that crimes centered on sexual affairs are not sufficient grounds to remove a president from office. After all, who in Washington has not had an affair or two or more? While the Democrats will have a majority in the U.S. House of Representatives beginning in January, they would need a large number of Republican votes in the Senate to reach the two-thirds’ majority necessary to remove Trump from office.

The Republicans are reluctant to remove Trump on impeachment charges. If they do vote to remove him, they will likely lose Trump’s white racist “base,” which continues to adore him. The “Trump base” will be furious if their adored leader is removed over what is essentially a sex scandal. Can Trump – and this is a concern for those ruling-class circles of the “Party of Order” who do not like Trump – be removed from office without splitting the Republican Party in such a way that its continued existence as one of the two “major parties” in the two-party system would be in question?

]]>https://critiqueofcrisistheory.wordpress.com/2018/12/23/political-and-economic-crises-pt-2/feed/0critiqueofcrisistheoryPolitical and Economic Criseshttps://critiqueofcrisistheory.wordpress.com/2018/11/25/political-and-economic-crises/
https://critiqueofcrisistheory.wordpress.com/2018/11/25/political-and-economic-crises/#respondSun, 25 Nov 2018 18:21:55 +0000http://critiqueofcrisistheory.wordpress.com/?p=6152I had originally planned to deal with the current state of the industrial cycle in this post. I assumed I would make a few passing comments on the U.S. mid-term elections and then go into the economic analysis. However, it became clear that the political crisis gripping the U.S. has reached a new stage. At the same time, the industrial cycle that began with the Great Recession of 2007-09 has now entered its terminal stage.

I have therefore decided to begin with the political crisis this month and, events allowing, examine the terminal stage of the current industrial cycle next month. One way or another, the interaction between the political crisis represented by Trump’s rise to power and the developing cyclical economic crisis will dominate national and global politics between now and the 2020 U.S. presidential election.

This blog has centered on capitalist economic crises, especially the periodic crises of overproduction. The industrial cycle with its periodic crises of overproduction and the political crises and wars that can turn into revolutions – or counterrevolutions – are closely intertwined in ways that are not always obvious.

]]>https://critiqueofcrisistheory.wordpress.com/2018/11/25/political-and-economic-crises/feed/0critiqueofcrisistheoryModern Money (Pt 5)https://critiqueofcrisistheory.wordpress.com/2018/10/28/modern-money-pt-5/
https://critiqueofcrisistheory.wordpress.com/2018/10/28/modern-money-pt-5/#commentsSun, 28 Oct 2018 15:50:46 +0000http://critiqueofcrisistheory.wordpress.com/?p=6097In recent weeks, U.S. politics were dramatically shaken by the Republican drive to get Trump’s Supreme Court nominee Judge Brett Kavanaugh confirmed by the U.S. Senate despite charges that he violently sexually assaulted women in high school and later while a student at Yale University. Though Kavanaugh was an extremely right-wing federal judge, his nomination was expected to go smoothly, with virtually unanimous support from the Republicans and some Democrats. That changed when a respected California professor of clinical psychology, Dr. Christine Blasey Ford, revealed that a drunken Kavanaugh had tried to rape her at a high school party. According to Dr. Ford, when she attempted to cry for help, Kavanaugh put his hand on her mouth causing her to fear that he might accidentally kill her.

Normally, a nominee for high office, let alone the Supreme Court, facing charges for crimes far less serious than attempted rape would be expected to withdraw his candidacy for the sake of “the nation and his family.” But not this time. Demonstrators, mostly women, descended on Washington demanding that the Senate reject the Kavanaugh nomination. After riveting testimony by Dr. Ford and a temper tantrum rebuttal by an outraged Kavanaugh, the Senate by a 50 to 48 vote confirmed Kavanaugh as one of nine Supreme Court justices. Every Republican with the exception of Senator Lisa Murkowski of Alaska, who voted “present,” voted for Kavanaugh’s confirmation. Every Democrat, with the exception of West Virginia Senator Joe Manchin, who voted to confirm Kavanaugh, voted against the nomination.

The Republicans hope the backlash against the women protesters, horrified that an accused rapist like Kavanaugh could ever be seated on the high court, will electrify their racist misogynistic base and limit the expected Democratic gains in the November 2018 mid-term elections. The conventional wisdom is that while the Democrats will win a somewhat larger majority than previously expected in the House they will face defeat in their bid to retake the Senate. If the Democrats against current expectations do win a majority in the Senate, they will have the power over the next two years to reject future Trump nominations to the Supreme Court.

]]>https://critiqueofcrisistheory.wordpress.com/2018/10/28/modern-money-pt-5/feed/3critiqueofcrisistheoryShift of schedulehttps://critiqueofcrisistheory.wordpress.com/2018/10/23/shift-of-schedule/
https://critiqueofcrisistheory.wordpress.com/2018/10/23/shift-of-schedule/#respondTue, 23 Oct 2018 03:34:08 +0000http://critiqueofcrisistheory.wordpress.com/?p=6034Please note that the next post, part 5 of the series on Modern Monetary Theory, will be published next Sunday, Nov. 28, delayed by one week. This shift in the regular four-week schedule will enable the following post to be published following the U.S. mid-term election rather than before, allowing the author to take account of the outcome. Beginning with the next post, we plan to resume the regular four-week schedule we have been adhering to since this blog began publication.

On September 5, The New York Times published an op-ed by an anonymous author who claims to be a top official of the Trump administration. The author describes him- or herself as a representative of the “resistance” among high officials working within the Trump administration. The author makes clear that this “resistance” is not “the popular ‘resistance’ of the left.” Instead, the author represents the resistance of the Republican wing of what I call the “Party of Order.”

What is the program of this “resistance”?

The op-ed author hails Trump’s “effective deregulation, historic tax reform, a more robust military and more.” This is the program of the Republican faction – and to a considerable extent the Democratic faction as well (2) — of the Party of Order. It includes an increase in the freedom of capital to pump more carbon dioxide into the atmosphere while leaking additional methane through his “relaxation” of regulation of the natural gas industry.

All these policies aim at increasing the rate of profit for the owners of capital at the expense of the working class and Mother Earth. The author also “supports” deep tax cuts for the rich with the intention of undermining social security, unemployment insurance, Medicare and Medicaid. Again, the aim is to raise the rate of profit on invested capital.

And not least, the op-ed writer supports spending more on the already “robust military,” as the author put it, so the U.S. empire can continue to terrorize the world. So if our Party of Order author is so enthusiastic about Trump’s policies, why “resist” Trump at all?

Trump versus free trade

The official complains that Trump’s “impulses are generally anti-trade and anti-democratic.” Notice the order. The biggest problem with Trump is that he is “anti-trade,” and as a kind of afterthought he is also “anti-democratic.” One is reminded of the words from the Communist Manifesto: “It [the capitalist class — SW] has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade.” So that’s the real problem with Trump. He is against “free trade.”

Our op-ed writer further complains, “In public and in private, President Trump shows a preference for autocrats and dictators, such as President Vladimir Putin of Russia and North Korea’s leader, Kim Jong-un, and displays little genuine appreciation for the ties that bind us to allied, like-minded nations.”

]]>https://critiqueofcrisistheory.wordpress.com/2018/09/23/modern-money-pt-4/feed/0critiqueofcrisistheoryModern Money (Pt 3)https://critiqueofcrisistheory.wordpress.com/2018/08/26/money-money-pt-3/
https://critiqueofcrisistheory.wordpress.com/2018/08/26/money-money-pt-3/#respondSun, 26 Aug 2018 20:26:00 +0000http://critiqueofcrisistheory.wordpress.com/?p=5981In this post, I contrast the analysis of foreign trade found in Professor L. Randall Wray’s book “Modern Money Theory” to the analysis of foreign trade that logically emerges from Marx’s theory of commodities, money and capital.

From trade war to war?

The August 10 on-line edition of the British rag The Express has a headline blaring, “China Fires SIX WARNINGS to US Navy in South China Sea.” When Chinese air force planes demanded the U.S. aircraft leave the area, the U.S. pilots arrogantly answered, according to The Express, “I am a sovereign immune United States naval aircraft conducting lawful military activities beyond the national airspace of any coastal state.” Notice, this occurred in the South China Sea near China and not anywhere near the U.S.

Now, if this was an isolated incident, it might not mean much. But the incident occurred against the background of the growing trade war between the U.S. and China. The Trump administration has made it clear that it is determined to reduce China’s share of the world market, especially but not only the U.S. part. If Trump’s policies are successful, it will bring China’s era of rapid development of capitalism to an end. Though China has made amazing progress and now has the highest level of industrial production in the world, it has about four times the population of the U.S. To reach a level of development equivalent to the U.S., China would need to have about four times the industrial and agricultural production of the U.S.

Another weakness of Chinese industry is that Chinese factories are dependent on high-tech components manufactured in South Korea, Taiwan and the United States. In addition, patents for these components are owned by Silicon Valley and British companies. Recent sanctions imposed by the Trump White House against the Chinese mobile phone manufacturer ZTE for allegedly violating U.S. sanctions against Iran and North Korea threatened to destroy the company because its phones depend on high-tech components that are not manufactured in China. Later, the Trump administration backed down amidst rumors that ZTE had to pay a bribe to Trump personally. The fact that a major Chinese company can be shut down at will by a U.S. president shows just how vulnerable Chinese industry is.

The productivity of labor in China, whether in industry or agriculture, is still far lower than that of the U.S. While wages have been rising in China, they are still far lower than the wages of U.S. workers or workers in the other imperialist countries. This means that industrial capitalists in China are far more likely to choose “labor-intensive” as opposed to “capital-intensive” methods of production. Or to use the more precise terminology of Marx, the organic composition of capital of Chinese industrial enterprises is much lower than those in the United States and other imperialist countries.

As of mid-July, the U.S. media and bourgeois politics appear to be swept by a wave of political madness, both on the side of supporters of President Trump and his “liberal-establishment” opponents. Trump calls the “mainstream” organs of the U.S. media such as The New York Times and Washington Post enemies of the people. This heated rhetoric is more reminiscent of the “reigns of terror” associated with certain stages of the French and Russian revolutions than the more normal polite discourse of U.S. Democratic and Republican Party politicians.

The “establishment media” counter Trump’s charge by claiming that Trump is working for “team Russia” rather than “team USA.” The Democrats are now engaged in a debate whether they should charge the president with “treason” because he failed to denounce President Putin at the mid-July summit meeting in Helsinki, Finland, for “Russian intervention” in the 2016 election.

The problem for the Democrats is that if Trump is actually guilty of treason, they – being the great patriots they are – should move to impeach him in the House of Representatives. Treason, after all, is an impeachable offense. However, up to now the Democratic leadership, both in the House and the Senate, opposes impeachment.

Behind the heated rhetoric – false and demagogic on both sides – is a growing conflict. That is the conflict between the need for the further development of a society where production is carried out by the socialized labor of the workers of the entire world, on one side, and the continued rule of capital over production and the nation state, on the other.

Trump and his supporters in the ruling class believe that U.S. imperialism can no longer afford the costs of the U.S. empire in its current form. They demand a major re-division of the markets of the world in favor of U.S. capitalists at the expense of capitalists of U.S. “allies” in Europe and Asia, as well as the People’s Republic of China. If this is not achieved in the near future, the Trumpists believe, the U.S. world empire will crumble.

Under current arrangements, the U.S. guarantees the European imperialists – above all, Germany – access to world markets and raw materials. Meanwhile, the Trumpists complain, Germany and other European imperialist powers are “freeloading” on the costs of the “defense” of the U.S. empire, which as a result fall disproportionately on the U.S.

Trump therefore wants to restructure the empire so that the European and Japanese satellites of the U.S. get a smaller share of the global market while paying more for the empire’s defense against the exploited and oppressed peoples of the world. And he wants this achieved now! Not surprisingly, German Chancellor Angela Merkel prefers the status quo, which indeed has turned out quite nicely for the German capitalists that Merkel serves.

The Chinese leaders, in order achieve their goal of a moderately developed China by mid-century, need a much larger share of the world market than China has at present. To put things in perspective, Germany with a population of a little more than 80 million, has about the same share of world trade as China with a population of over 1 billion. If Trump achieves his goal, China will be locked into a situation of permanent underdevelopment.

]]>https://critiqueofcrisistheory.wordpress.com/2018/07/29/modern-money-pt-2/feed/0critiqueofcrisistheoryModern Moneyhttps://critiqueofcrisistheory.wordpress.com/2018/07/01/modern-money/
https://critiqueofcrisistheory.wordpress.com/2018/07/01/modern-money/#respondSun, 01 Jul 2018 14:57:22 +0000http://critiqueofcrisistheory.wordpress.com/?p=5882By the time of the U.S. presidential election in November 2020, historical experience and the condition of global money markets suggest that the current global economic boom will probably have run its course. While the latest government economic figures show the current boom continuing in the United States and Europe, serious crises have already hit the currencies of Argentina and Turkey.

The dollar after a period of weakness has begun rising against the euro and other currencies and against gold. This sudden dollar strength is not only the result of rising U.S. interest rates. Trump’s threat to impose high tariffs on a whole range of commodities starting on July 6 has set off a flight into the dollar due to its role as the international means of payment. We have seen many such flights into the dollar over the years whenever a crisis threatens, whether political, military or economic.

If no compromise is reached by July 6 and Trump’s tariffs – and the retaliatory tariffs of competing nations – go into effect, it is possible that some commodity sales will fall through, which could trigger an international credit crisis. If severe enough, such a crisis would quickly throw the global capitalist economy into recession. This is all the more likely given the very late stage in the current industrial cycle, which has made the global credit system increasingly fragile even in the absence of a trade war. Whatever happens in the short run, Trump’s economic nationalist “America First” policies are undermining the entire world order that has prevailed since 1945. But that is the subject for another post.

Because capitalist economic crises tend to manifest themselves first in the spheres of currency and then credit, many reformers have sought cures for crises through reforms to the currency and credit systems. This creates the illusion in the minds of middle-class reformers, who stand between the two main class camps of modern society, the capitalist class and the working class, that the contradictions of capitalist society can be overcome through reforming the credit/monetary system. The U.S., in particular, has produced numerous monetary reform movements.